Tesla is increasing the price of its “Full Self Driving” (FSD) suite from $12,000 to $15,000 on September 5 when FSD Beta version 10.69.2 goes out for wide release. This is just the latest step in Tesla’s occasional but consistent FSD price increases. Each time the FSD suite gets significant new features or improves a great deal, the price goes up by a couple thousand or a few thousand dollars. This has been the story for a few years, as Tesla CEO Elon Musk said it would be.
When I bought FSD with my Tesla Model 3 Standard Range Plus exactly 3 years ago, in August 2019, I paid $6,000 for it. That’s a $9,000 increase in cost in just 3 years, or $3,000 a year. In another 3 years, the FSD suite will surely cost well above $15,000. Right?
Note, you can upgrade your existing car to FSD in 2 mins via the Tesla app
— Elon Musk (@elonmusk) August 21, 2022
There are many opinions on FSD and its cost. I’ll toss mine into the ring as well, as someone who has had FSD Beta for about a year and who has used Tesla Autopilot since it did little more than stay in its lane and not run into the car driving in front of it. Included in this little op-ed are my thoughts on FSD progress, the long-term vision for FSD, robotaxis, appreciation (or not) of cars with FSD on them, and perhaps a bit more.
There’s no doubt about it: Tesla has missed targeted timelines for robotaxi-capable full self driving. There’s also no denying that FSD now performs several actions that it didn’t perform a few years ago, or even one or two years ago. That said, somewhere in between or on the side of those two points, actual technological improvement has been a matter of much debate. According to some, Tesla is on the verge of launching millions of robotaxis with a simple software update. I, like many others, am more skeptical and not thrilled with current capabilities or the seeming rate of improvement. While a Tesla FSD can drive from Point A to Point B on its own (with only human supervision), my experience is that it does so in a very jerky, unpleasant, and sometimes legitimately scary way. Furthermore, it’s been hard to notice any progress in making these drives smoother. Again, many people disagree with my take, but I don’t know how. I went on a 5 minute drive to the bank today with the car on FSD mode and it jerked unpleasantly, braked too much, or didn’t act correctly in 7 or so instances. There’s no way I’d send someone on that 5-minute drive as a robotaxi customer (I know, it’s not robotaxi capable yet, but still …). Furthermore, these problems seem to be about the same as they were almost a year ago. Perhaps users with a more positive take on FSD progress and I are experiencing very different things for some reason. I don’t know. Of course, many people have the same take as me, including people who — like me — were super bullish on the tech and Tesla’s approach in the past. I know multiple Tesla superfans who basically won’t use FSD.
One of my 4 top reasons for buying a Tesla Model 3 in 2019 was “Autonomy.” I definitely didn’t start off thinking that 3 years later I’d be having this take on FSD. I’d still like to think that Tesla AI progress will be so good that my car will eventually be robotaxi capable. That’s the dream. I hope it comes true. However, I would not buy a Tesla and add on FSD today at an extra cost of $12,000 or $15,000. I don’t have enough faith in it. Of course, if my lack of faith is proven to be a mistake, I will be jumping for joy and hooping and hollering.
Despite all of those issues and concerns, though, there is one positive thing to write home about: the apparent market value of my FSD suite has gone from $6,000 to $15,000 in 3 years! Stunning! Who wouldn’t like that with any product they bought? That said … from what I’ve been told, people who sell their Tesla vehicles with FSD equipped are not getting that same bump in resale value. People on the used car market will not buy a Tesla with FSD for $15,000 more than a Tesla without it. So, while the value of my car has increased by $9,000 in theory from having FSD, it hasn’t really. Oy.
But maybe in the future? Well, as far as I can tell, that all depends on how well FSD progresses. If it remains an ADAS (advanced driver assistance system) but doesn’t get to full robotaxi capability, it just seems that fewer and fewer people are going to pay the premium for it. The “take rate” for FSD on new car purchases has reportedly dropped dramatically in the past few years, further indication that while some people will pay a small fortune for FSD, many are not bullish on Tesla’s approach and will not pay the rising prices. Of course, if Elon and his AI team end up nailing it, proving countless people wrong for the umpteenth time, the commercial (aka money-making) usefulness of FSD will skyrocket and so will its value on the used car market as well as the new car market. It could happen. No one should say there’s a 0% chance of that — because we simply don’t know.
Naturally, just like Elon, Tesla fans, and I can say “told you so” to anyone who said Tesla could never sell 500,000 vehicles, could never mass produce the Model 3 or Model Y, and would be bankrupt by now; people who said Tesla wouldn’t have robotaxis on the road by 2020, by 2021, or by 2022 can say “told you so” to us. What about 2023, 2024, or 2025? What about 2030? People can argue for their own predictions all day long, until blue in the face. Indeed, people have been arguing about this for the past several years. Continue the discussion down in the comments below this piece.
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